The unemployment benefits system is a lifeline for those who have lost jobs through no fault of their own and need help before they can find another one.
In 2020, when the coronavirus pandemic arrived, the unemployment system changed more in a few months than it had in the past few decades. Unemployment was higher than at any time since the Great Depression. Tens of millions of people filed for assistance. And the benefits system expanded to cover those whose jobs would not have traditionally included them.
Not only are there now different systems for “gig workers” and former full-time employees, but every state has its own rules for eligibility and different procedures for getting and maintaining benefits. There are, however, some basic guidelines for how to file for unemployment no matter what state you are in.
What Is Unemployment?
There is a broad mosaic of social programs designed to assist people with low incomes or no income with either money or “in kind” benefits—specific goods and services as opposed to cash.
While some of these programs are for those with low incomes, like SNAP (otherwise known as food stamps) and Medicaid, others have different eligibility requirements, like Social Security for workers who are at least 62 and disability insurance for those who can’t work because of a specific condition. Unemployment insurance is meant to assist a specific group that does not capture all of those who aren’t working.
In normal times, about 4 million to 5.5 million people leave their jobs every month, with under 2 million a month classified as “layoffs and discharges,” and 1.5 million to 3.5 million classified as “quits” (before the latest economic crisis, the “quit” rate rose as the labor market improved). A portion of those who lose their jobs are eligible for unemployment benefits.
Filing for Unemployment
The first question to ask is if you’re eligible for benefits in the first place.
Typically, to be eligible for unemployment you need to have worked a salaried job, where you earned the benefits. Employers pay federal unemployment tax to fund the unemployment account of the federal government. Businesses also may have to pay state unemployment taxes.
By working a set amount of time—it varies from state to state—for an employer that pays that tax, you become eligible to receive unemployment benefits.
The first part of eligibility relates to how you work. The second part relates to how you stop working.
Unemployment is designed to assist those who are no longer working “through no fault of (their) own,” according to the Department of Labor. While each state’s exact rules are different, the general guideline is that you are only eligible for unemployment if you’ve lost your job for economic reasons on the part of your employer as opposed to having been terminated for cause or having left voluntarily.
If you meet the two conditions, you can usually then apply for unemployment benefits from your state.
There are some basic commonalities among the states: You will need to provide your address, phone number, address of your former employer, Social Security number, and the dates that you were employed by your former employer.
How Much Will You Receive?
It varies by state, but the average maximum benefit before the COVID-19 pandemic was $333 a week, according to the Center on Budget and Policy Priorities. Your benefit is based on your former wages, with higher-wage workers typically getting more benefits, up to some cap.
Through July 2020, $600 a week was added to unemployment benefits. After that the federal government used a different program to fund states, adding $300 a week to their existing unemployment recipients, but the funding was limited.
Then in late December 2020, a signed relief package reinstated the weekly federal enhancement that expired in July, this time at $300 per week for 11 weeks, to help long-term unemployed people, self-employed people, and gig workers.
What’s the PUA Program?
After passage of the CARES Act, the federal government helped set up a parallel unemployment program for workers who had lost income because of the economic crisis but were ineligible for unemployment benefits because they were self-employed or didn’t have the exact work history that would make them eligible for unemployment insurance.
The system for other workers who lost their jobs is called Pandemic Unemployment Assistance, or PUA.
PUA benefits were targeted to those who were not eligible for regular unemployment benefits and were unemployed, partially unemployed, or unable to work because of health or economic consequences of the COVID-19 pandemic.
The relief package signed into law on Dec. 27, 2020, extended the PUA program by up to 11 weeks.
It also extended a different program, the Pandemic Emergency Unemployment Compensation program, by 11 weeks. The PEUC program allows states to provide up to 13 weeks of federally funded unemployment benefits to those who have already used all available state benefits.
Finally, the relief measures provided a supplement of $100 per week to certain “mixed earners” who earned at least $5,000 a year in self-employment income but were eligible for regular unemployment assistance, not PUA.
Which Kind of Benefits Are You Eligible For?
This is a complicated question that may have to be decided case by case by your state’s unemployment officials, but typically if you receive a Form W-2 and lose your job through a layoff, you will be eligible for unemployment Insurance, while if you receive a Form 1099, you are typically self-employed and might be eligible for PUA benefits.
When to Apply
As soon as possible. The process is not always smooth and easy during normal times, and so you want to apply as soon as you can gather all relevant information and documents.
Even when the system isn’t overloaded in your state, there are some delays built into the process that certifies your eligibility before you start receiving benefits.
How to Apply
This varies state by state, and you can look up your state’s procedures or where to apply either through the Department of Labor or through a database maintained by the National Employment Law Project.
You typically apply online or on the phone.
In the months following the massive unemployment spikes in March and April, some states shifted toward in-person applications because their normal systems were overloaded.
How Long Does It Take to Receive Benefits?
The Department of Labor says it typically takes “two to three weeks” to receive benefits, but there have been instances of people waiting much longer.
Even if it takes a long time to start receiving benefits, you are supposed to receive benefits for the full amount of time from when you successfully applied (in some states there’s a one-week waiting period), not just from when you started receiving benefits.
How Will You Receive Benefits?
Once again, there are variations among states about the form in which your unemployment benefits are received.
Some states offer direct deposit, meaning you can receive your unemployment benefits as you would your paycheck, directly into your bank account.
Others disburse benefits through a debit card mailed by the state.
One benefit of using a debit card is that an unemployment recipient does not need a bank account in order to access benefits. While this is convenient for those without bank accounts, there are some downsides, like limits on ATMs that can be used without fees, and the general limitation on which merchants accept debit cards.
Using a debit card also puts you at the mercy of the mail before you can start using benefits. If you were getting paid from your job via direct deposit, you will likely receive your benefits faster.
How Can You Remain Eligible for Benefits?
Again, this varies by state, but generally you have to have some record of seeking work and being willing to accept a job that is offered. States will typically have some kind of form or portal that you are required to fill out or log in to show that you are looking for work.
Some states have modified or suspended these requirements during the coronavirus pandemic. California no longer requires unemployment recipients to search for work; other states still do.
How to Apply for PUA
The application process, again, varies state by state and is a bit different than the process for applying for unemployment insurance benefits.
In some states it may take longer to receive PUA benefits, as the process requires more work to certify.
How Long Do Benefits Last?
Typically unemployment benefits last, at most, 26 weeks, around six months, while several provide fewer weeks of benefits and some states may be a smidgen longer.
Benefit extensions in 2020-21 stretched benefits to up to 59 weeks, depending on a number of factors.
Putting Proceeds to Work
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